French regulator launches probe into Tesco-Carrefour deal

The French competition watchdog has launched an investigation into the strategic tie-up between Tesco and Carrefour.

The Autorite de la Concurrence said it was looking into the competitive impact of the purchasing agreement to assess its effect on the food sector, both for suppliers and consumers.

Tesco and Carrefour have embarked on a partnership to jointly buy own-brand products and other items over a three-year period in a bid to negotiate better deals with suppliers.

The watchdog will be interviewing the suppliers affected by the deal as well as supermarket competitors.

The regulator is also investigating similar alliances between France's Auchan, Casino, Schiever, and Germany's Metro, and Carrefour and Systeme U.

The probe has been set up because a new wave of agreements between grocers are larger in scale than the deals signed previously.

The supermarket partnerships now cover both branded goods and own-brand products, including food, cleaning, personal hygiene, and general merchandise.

"Consequently, they potentially involve a significant part of the consumer goods marketed by the food distribution actors," the watchdog said.

Tesco's deal with Carrefour came after its £3.7 billion (€4.2bn) with wholesaler Booker Group.

In June, the supermarket announced that it had delivered its 10th consecutive quarter of sales growth, boosted by Booker's integration.

The group's like-for-like sales were up 1.8% for the 13 weeks to May 26, with comparable sales rising by 3.5% in the UK and Ireland.

Tesco's UK supermarket sales rose 2.1% on a like-for-like basis, while Booker's sales, including tobacco, jumped 14.3% over the period.

PA


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